In July last year, the Adani Group signed a MoU with Tamil Nadu’s government, a move seen as necessary for large scale solar power generation in the state. According to the agreement, the Tamil Nadu Generation and Distribution Corporation (Tangedco, the State’s power utility) would purchase all the power produced that would be produced by the 648 MW Ramanathapuram district solar park at INR7.01 per unit for the next 25 years. Soon after, it came out that in Madhya Pradesh, the Adani Group had quoted a price of INR6.04 per unit. This was naturally followed by Opposition parties in Tamil Nadu protesting and demanding a white paper.

However, the controversy dates back to September 2014 when the Tamil Nadu Electricity Regulatory Commission (TNERC) announced a solar power tariff order, which stated that any company generating solar power before September 11, 2015 would be eligible to receive a rate of INR7.01 per unit. This encouraged seven solar power developers, of which Adani Group was not a part, to file petitions asking the control period to be extended to two years, which were later rejected.

In 2014, the price of solar power came down by 14 per cent, which prompted the control period to be fixed for one year.

In an order in March last year, the Central Electricity Regulatory Commission notified that the capital cost of solar power had fallen to INR5.86 crore per MW which meant that solar power prices had dropped by INR1.14 per unit within this period.

Tamil Nadu has over 10 lakh households that consume above 500 units of solar power annually, with 5 lakh of these households in Chennai. Dravidian politics in the state are centred around populist schemes, which may cause the burden of high-cost power to be borne by high-end domestic users in cities and other industrial/commercial establishments.

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